Jobs and economic development package totals almost $1.4 billion

State spending on jobs, economic development, labor, and industry will total $1.37 billion during the 2024-25 biennium. The law authorizing these appropriations will also make scores of accompanying policy changes, mainly in the realm of employer-employee relations.

Rep. Hodan Hassan (DFL-Mpls) and Senate President Bobby Joe Champion (DFL-Mpls) sponsor the law that takes effect July 1, 2023, unless otherwise noted.

HF3028/SF3035*/CH53

Funding

The single largest appropriation is to create the Minnesota Forward Fund, with $500 million set aside in the hopes of facilitating private investment and jumpstarting Minnesota’s economic competitiveness:

• $250 million to match federal funds for microelectronic manufacturing;

• $100 million to match federal funds for bioindustrial manufacturing;

• $75 million for the state competitiveness fund;

• $50 million for businesses to match federal funds for nonspecific federal programs; and

• $25 million for the Climate Innovation Finance Authority.

The Department of Employment and Economic Development will receive $693 million to help the state continue its post-COVID-19 recovery, address the workforce shortage, and reduce economic disparities.

Of this, $125.3 million will go toward carrying out the PROMISE Act by empowering the department to make grants and loans to businesses and partner organizations “in communities that have been adversely affected by structural racial discrimination, civil unrest, lack of access to capital, loss of population or an aging population, or lack of regional economic diversification.” Over 80% of these dollars will be directed toward the Twin Cities metropolitan area, mainly to help recover from the 2020 civil unrest.

And $5 million will be distributed to northern Minnesota counties economically harmed by the closure of the Canadian border during the COVID-19 pandemic.

Five new programs will be established to support small businesses and entrepreneurs:

• $12.9 million for the Small Business Assistance Partnerships Program;

• $10 million for the Minnesota Expanding Opportunity Fund Program;

• $5 million for Launch Minnesota, to spur innovation and grow technology startups;

• $5 million for the emerging developer fund program; and

• $3 million for the community wealth-building grant program.

Workforce development spending will include:

• $50 million in targeted population workforce grants for organizations that provide job skills training and businesses that hire and retain people of color;

• $20 million for the Drive for Five Initiative;

• $14.3 million in additional funding for the Pathways to Prosperity competitive grant program;

• $2 million to establish the Getting to Work grant program; and

• $1.5 million to establish the Office of New Americans for helping immigrants economically integrate into Minnesota.

Other DEED divisions will receive the following allotments:

• $91.4 million for Vocational Rehabilitation Services;

• $26.1 million for General Support Services; and

• $20.9 million for State Services for the Blind.

The law will also distribute $21 million for various child care initiatives, including the establishment of the Office of Child Care Community Partnerships, and send $5 million to Bloomington as the city prepares its bid to host the 2027 World Expo.

Separate from DEED, Explore Minnesota Tourism will have its mission and structure greatly refined and see its budget more than doubled to $62.3 million.

Governmental authorities overseeing employer-employee relations will receive the remaining $108.6 million, with much of the funding going to the Department of Labor and Industry to bolster workplace safety and implement major regulatory changes, including:

• $30.9 million for the Workers’ Compensation Fund;

• $7.5 million for the Bureau of Mediation Services, including $1.5 million for the Public Employment Relations Board;

• $5.1 million for the Workers’ Compensation Court of Appeals;

• $4.1 million for wage theft prevention;

• $3.2 million for prevailing wage enforcement;

• $3 million in grants for clean economy jobs;

• $2 million for the ergonomics safety program; and

• $2 million for the labor education advancement grant program to foster the employment of people of color, Indigenous people, and women in apprenticeable trades.

And $3.7 million will be appropriated to the department for enforcement and other duties, while $600,000 will be distributed to community organizations for outreach and education regarding workers’ rights under the legislation.

More policy provisions

The law will guarantee earned sick and safe time for nearly all Minnesota workers. Paid sick time will be accrued at the rate of one hour for every 30 hours worked, maxing out at 48 hours per year, effective Jan. 1, 2024.

Effective May 24, 2023, restrictive franchise agreements will be banned, under which fast food restaurants and other chain businesses collude to not hire each other’s workers without the worker’s knowledge; and the State Building Code will be modified to require adult-size changing facilities in newly constructed or substantially remodeled public restrooms.

Mostly effective July 1, 2023, health and safety regulations will be strengthened at meat and poultry processing workplaces with 100 or more employees, largely in response to working conditions experienced during the COVID-19 pandemic.

Also effective on the same date a Nursing Home Workforce Standards Board will be created, with a stated aim of establishing industrywide standards for employee wages and working conditions; nearly all non-compete covenants will be rendered void and unenforceable; and the Women’s Economic Security Act will be updated, mainly in regard to workplace protections for pregnant and breastfeeding employees.

Effective Aug. 1, 2023:

• the Packinghouse Workers Bill of Rights will be updated to both expand protections for food processing workers and extend those protections to a wider pool of workers;

• new worker safety requirements will be established in the warehouse industry;

• to tackle wage theft in the construction industry, general contractors will be held civilly liable for malfeasance committed by their hired subcontractors;

• employers will be prohibited from compelling employee attendance at meetings that discuss religious matters, political issues, or arguments against unionization;

• fines will more than double for failing to post employees’ rights posters in a workplace with willful or repeated violations as high as $156,259 per violation; serious or nonserious violations will max out at $15,625 per violation; and

• the installation of solar panels will be added to the list of contractor “special skills.”

Additionally, substantial modifications to the Public Employment Labor Relations Act – which governs collective bargaining and unionization rights in the public will: require the dissemination of employee personnel data to public sector unions for several purposes; guarantee payment of state employee salaries and benefits in the event of a state government shutdown; allow payroll deduction for union dues and political fund contributions; enable workplace unionization without going through the process of a formal election if over 50% of employees provide authorization for representation; permit Tier 1 K-12 teachers and part-time professors in the Minnesota State system to join a union; and place “adult-to-student ratios in classrooms, student testing, and student-to-personnel ratios” under the “terms and conditions of employment” for school employees to be negotiated during collective bargaining.

Effective Jan. 1, 2024, an ergonomics safety program will be mandated at all hospitals, outpatient surgical centers, and nursing homes, as well as at all warehouses and meatpacking or poultry processing sites with 100 or more workers to minimize workplace injuries. Also, a novel regulatory framework for combative sports will be created, and clear building and permitting standards will be established for the construction of tiny homes by houses of worship to shelter the unhoused.

SF3035* / HF3028 / CH53